David Hone World Business Council for Sustainable Development Energy and Climate

Transcription

1 1 Directions to 2050 Realizing the full potential of technology Actions to promote RD&DD Involving developing countries Utilising the market David Hone Energy and Climate

2 Our energy system 2 Liquids Oil Biomass Gas Coal Nuclear Renewables Direct combustion Industry and Manufacturing Primary Energy Energy Power Generation Energy Final Energy Energy Mobility Buildings Consumer Choices

3 Pathways to A significant shift required in both energy per GDP and CO 2 per unit of energy used 400 Energy Use, GJ per capita CO 2 per energy unit used, t / TJ EU USA & Canada Japan 50 China 0 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 GDP per capita, US$ 1995 (ppp)

4 Options for change enabling technologies 4 Emission reduction (CO 2 / unit energy) A further shift to natural gas Nuclear power Renewables Bio-products Carbon capture and storage Energy conservation and efficiency (energy / unit GDP) Mass transportation Road transport Buildings Low energy appliances Doing things differently

5 Global Milestones Energy Efficiency Achieved significant efficiency gains, with developed countries improving by more than 2% annually. Continue to achieve significant energy efficiency gains in all countries.

6 Global Milestones Renewables Introduced wind and solar power on a significant scale globally, with over 1 TW of installed wind capacity. Deployed wind, wave, tidal and solar power on a large scale globally, with renewables (including hydro & biomass) contributing about half to the power sector.

7 Global Milestones Carbon Capture and Storage Commercialised coal power generation with carbon capture and storage and have some 100 or more plants in operation globally. Deployed coal power generation with carbon capture and storage and have some 1000 or more plants in operation globally.

8 Global Milestones Nuclear Gained full public acceptance of nuclear power as a viable zerocarbon power generation option and restarted long term growth in this industry. Expanded the role of nuclear in power generation, reaching some 10% globally.

9 Global Milestones Vehicles Achieved wide deployment of high efficiency vehicles (e.g. hybrid diesel) in developed countries, with developing countries following, and started deployment of (near) zero emission vehicles. Deployed high efficiency vehicles globally, with overall efficiency doubling (20 => 40 mpg) through the period.

10 Global Milestones Automotive Fuels Recognised the potential of advanced biofuels and reached a level of more than 5% bio-fuels in transport fuels globally. A range of alternative vehicle fuels such as advanced bio-fuels, electricity and hydrogen in everyday use and making up some 40% of road transport fuel.

11 Technology development and deployment 11 Future policy must focus on both the development of new technology and the rapid deployment of the both new and existing technology 100 Technology cost Early development phase may need direct assistance Earlier deployment Purchase incentives and/or the CO 2 market drive(s) early deployment More cost competitive Purchase incentives and/or CO 2 price Competing technology Number of installations / Products

12 Opportunity starts at the national / sectoral level 12 CO 2 Emissions, MT per annum 1000 A. Opportunity Wedges (National) (Developed Country Example) National CO 2 trajectory B. National/Sectoral Goals & Targets Efficiency Buildings Industry Domestic xx % p.a. through to 20xx Power Renewables xx MW p.a. by 20xx Generation CCS xx tonnes CO 2 p.a. Mobility Bio-fuels xx litres p.a. by 20xx Efficiency xx mpg by 20xx Choice Hybrid / Diesel uptake Mass transit C. National Policies Buildings adopt new country building standards, design awareness Industry Sectoral agreements, emissions trading, technology standards Domestic carbon labeling, increased product standards (e.g. standby energy) Renewable Energy renewables targets. CCS funding for infrastructure, tax cuts on capital investments, price signals for carbon via emissions trading Biofuels targets, support for manufacturing, CO 2 labeling Vehicle Efficiency - support technology, incentives, sectoral agreements Mobility Choice - consumer incentives, promote public/private partnerships for transport networks Target Vehicle Efficiency Renewable Power Buildings Domestic Mobility - Fuels Mobility Choice CCS Industry Other Actions

13 The development of energy policy 13 Energy policy is set at the national level. It is now one of the principal responsibilities of government. The development of energy policy is responsive to; Financial considerations Available natural resources Security of supply Environmental signals A future framework must recognise the sovereign nature of energy policy decisions, but at the same time provide clarity, context and drive for such decisions.

14 A future framework What is needed? A long-term goal Established by 2010 Described in terms of CO 2 e * emissions. 2. Technology development and deployment framework Expanded support for R&D Global standards Technology transfer driven by standards Risk management 3. Emissions management at national and sectoral level Bottom-up approach aligned with energy policy Sector by sector Expanded project mechanism Progressive inclusion of all countries 4. Linkage framework to encourage international trading * All GHGs but as CO 2 equivalent

15 Clean development partnerships & programs 15 Clean development partnerships and technology programs based on standards and benchmarking can drive new technology development.

16 Managing new technology risks 16 Direct and Indirect Incentives Well funded clean development networks with aggressive targets for pilot and near commercial demonstrations. R&D incentives Infrastructure funding CO 2 product labelling Regulatory Uncertainty Multilateral financing mechanisms such as GEF Far-out issuance of reduction units as a special case within the project mechanisms.

17 CO 2 targets and trading at national level At the national level: Opportunity Wedges (National) (Developed Country Example) CO 2 Emissions, MT per annum National CO 2 trajectory Target Vehicle Efficiency Renewable Power Buildings Domestic Mobility - Fuels Mobility Choice CCS Industry Other Actions Trajectory for 2013 to 2018 for international allocation purposes.

18 CO 2 targets and trading derived from sectors 18 CO 2 Emissions, MT per annum Or at the sector level only: Opportunity Wedges (National) (Developed Country Example) 0 National CO 2 trajectory Target Vehicle Efficiency Renewable Power Buildings Domestic Mobility - Fuels Mobility Choice CCS Industry Other Actions CCS Renewables Power sector CO 2 trajectory Trajectory for 2013 to 2018 for international allocation purposes.

19 Progressive Build-Up from National Programs 19 A global GHG market remains an important goal of the revised international framework. But it is constructed bottom-up through a linkage framework, rather than a big-bang creation from the top. Economy wide emissions Business as usual profile Economy wide ETS Net emissions Structured multinational cement sectoral initiative. Power generation emissions Business as usual profile Cement industry Business as usual profile Transport emissions Business as usual profile Energy efficiency Best available technology Renewables / CCS wedge Bio-fuel wedge Emissions, tonnes CO2 Emissions, tonnes CO2 Net emissions Emissions, tonnes CO2 per tonne of cement Emissions, tonnes CO2 Net emissions Progressive build-up from national programs Carbon Emissions, GT per annum

20 Framework Comparison 20 Kyoto Agenda Top down reduction obligations Short term (5 year) compliance obligation WBCSD Revised Framework Bottom-up National / sector policies and commitments Longer term (50 year emissions trajectory) Allocation of a reduction obligation equitable allocation difficult to achieve politically Least cost compliance not enough certainty for large investments in new technologies National opportunities and policies aligned with energy security and climate change priorities Technology development and deployment focus Emissions market Targets tons reduced relative to a baseline Deeper engagement of capital markets and greater influence over allocation of capital driven by a wide range of policies and a broad based emissions market. Targets still in terms of carbon reductions but aligned to specific actions with GHG benefits e.g. XX MW of wind power by 20XX.

21 Examples at national level 21 Liquids Oil Biomass Gas Coal Nuclear Renewables Direct combustion Industry and Manufacturing Primary Energy Energy Power Generation Energy Final Energy Energy Mobility Buildings Consumer Choices

22 Power Generation What is needed 22 Key directions... Decarbonisation GHG emissions management Energy efficiency improvements Electriticy as a preferred domestic and commercial final energy source Key technologies Renewables Nuclear power Clean coal technology - including carbon capture and storage (CCS) Natural gas

23 Power Generation How it could work 23 Technology cost Financial assistance for large scale CCS demos International collaboration for Gen IV nuclear development National renewables goal National infrastructure CO 2 pipelines Emissions trading ( cap-and-trade ) Transmission grids Extensive use of project mechanisms (CDM) for CCS, hydro and renewables Liability issues (Nuclear and CCS) Green electricity tariffs Renewable certificates Government procurement Planning permission Competing technology Number of installations / Products

24 Mobility What is needed 24 Key directions... Involve fuel producers, vehicle makers and the consumer. New more efficient vehicles Broadening the range and type of fuels Changing the way we use mobility Key technologies... Hybrids and plug-in hybrids (drive trains and batteries) 2nd generation biofuels, synthetic diesels, electricity. Integrated public / private transport mechanisms Hydrogen

25 Mobility How it could work 25 Technology cost Support development of fuel manufacturing technology. Demonstration projects for advanced technologies (e.g. hydrogen fuel-cell vehicles). R&D support for new vehicle technologies (e.g. plug-in hybrids), vehicle efficiency programmes and alternative fuel vehicles. Consumer awareness programmes focussing Consumer awareness programmes. on vehicle choice, use and maintenance Public transport investment. (e.g. tyres, servicing). CO 2 certification of fuels, especially biofuels, as a basis for fuel taxes and duty. Government procurement policy. Sectoral approach driven by benchmarking to improve vehicle efficiency. Road use schemes (congestion charging) Competing technology Number of installations / Products

26 A Sustainable Energy Future 26 Understanding the energy challenge Recognising the need for a sustainable approach Investing in technology Using the markets Delivering solutions Doing it now!

27 An end in sight.....? 27